Staff Reporters
Jul 23, 2013

Market Update: Indonesia's evolving consumer demands

Consumers in Indonesia's burgeoning middle class are shifting their focus from basic demands to lifestyle needs such as financial security, wellness, product quality and experience, according to Nielsen.

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Market Update is a monthly feature, in partnership with Nielsen, that provides a quick summary of key economic drivers and consumer trends in a specific Asia-Pacific market.

Top five Indonesia consumer trends

1. Indonesian consumers’ purchase drivers are shifting from quantity and price to quality and experience:

  • Continued stable economic growth is leading to increased per-capita GDP and a growing middle-class population;
  • This is led by upper class and metropolitan populations.

2. Emerging middle-class consumers are often first-time purchasers of products and services:

  • While initial product appeal for these first-time buyers hinges on packaging or promotions, middle-class consumers are becoming more discerning and educated, and are increasingly focusing on product authenticity, value, health and nutritional benefits;
  • The rising middle class is also driving increased demand for ‘affordable luxury’ and ‘affordable premium’ offerings which they believe reflect their rising social status.

3. Consumers are shifting their focus from basic demands to lifestyle:

  • Demand for lifestyle-related products and brands is on the rise.

4. Demand for travel and entertainment products/services is increasing:

  • Rising incomes are leading to more demand for experiential offerings;
  • The population is experiencing changing lifestyles, with consumers leading busier lives and seeking therapeutic relief from everyday stresses;
  • Consumer are hungry for experience, looking to de-stress, and willing to pay.

5. Health, convenience and feeling/looking good are elements that drive growth:

  • Products that provide a combination of these elements are outstripping average growth rates.

Top trends in Indonesia retail

  • Expansion of shopping malls
  • Mass marketing
  • Massive new distribution infrastructure
  • Major expansion national chains
  • New business in advertising, media, communication
  • Big brands expanding nationwide
  • Lifestyle branding

 

 

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